CONNECT WITH US
Fintech

Fintech

Stablecoins Have a $10 Million Problem: All That Money Is Going Back to the Bank

PYMNTS – Fintech logo

Published on

Add as a preferred source on Google
Stablecoins Have a $10 Million Problem: All That Money Is Going Back to the Bank

Stablecoins can move money faster than businesses can use it. Companies still depend on banks for payroll, supplier payments and liquidity, limiting the economic benefits of instant cross-border settlement.

Stablecoins’ biggest strength could become a systemic weakness. The FSB warns that 24/7 digital dollar transfers depend on traditional financial markets for liquidity and redemption, creating new risks when those markets cannot keep pace.

The next stablecoin winner will control what happens after payment. Banks, FinTechs and issuers are competing to solve converting, managing and deploying digital dollars without erasing the savings that made stablecoins attractive.

A business receives $10 million in stablecoins on Monday, and by Friday, much of it could be back in a bank account. The payment worked. The problem, however, is what needed to happen next.

Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

Stablecoin payments may have eliminated hours of settlement friction, but they haven’t eliminated the financial infrastructure waiting on the other side. The PYMNTS Intelligence report “Waiting for Certainty: Why Most CFOs Are Holding Back on Crypto and Stablecoins” found in March that 88% of firms receiving stablecoins convert them immediately into U.S. dollars.

Chief financial officers still run payroll through banks, mid-market suppliers still expect conventional currency, and even the most forward-thinking corporate treasurers still need deposits they can invest, borrow against and use to meet obligations today.

A new Financial Stability Board report, “ Global Stablecoin Arrangements: Cross-Border Vulnerabilities and Financial Stability Monitoring ,” published Monday (Oct.


Source link
Related Topics:Fintech

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We TheMorningPulse.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It's possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.